The US government’s efforts to open up the notoriously murky
oil sector to public scrutiny were undermined today by Exxon and Chevron’s
failure to agree to declare their tax payments in the US, as required by a
landmark global transparency initiative that the US has recently joined.

Yesterday the US released its first report as a member of
the Extractive Industries Transparency Initiative (EITI) (1) , a global standard which aims to put information about government revenues
from deals struck with oil and mining companies into the public domain in 49
countries across the world. This includes the taxes the companies pay, information
which is key to ensuring people know what benefits they get from deals for
their natural resources, and that decisions over such operations are made in
their interest.

It is therefore deeply disappointing for US citizens that
major companies like ExxonMobil and Chevron have opted not to disclose their
tax contribution in the US. Other companies like Royal Dutch Shell and BP have
shown that transparency is feasible and part of good corporate governance by
reporting their tax payments.

“You have to ask what Exxon and Chevron have to hide from
the US public,” said Zorka Milin, Senior Legal Advisor at Global Witness. “Citizens
can now see that BP has contributed US$85 million in US federal corporate taxes during 2013, and decide if
they think they are getting a fair deal for their resources. So why have ExxonMobil
and Chevron refused to do the same?”

The news comes as the global push for greater transparency
in the oil sector gathers momentum, with the US again lagging behind. Laws have
recently been passed in the UK and EU to make companies like Shell and BP disclose
the payments they make to foreign governments for access to natural resources. But a matching US law, known as Section 1504 of the Dodd-Frank Act, has been
long delayed due to vehement opposition from the oil industry group American
Petroleum Institute, in which ExxonMobil and Chevron are members.

More than five years after this law was enacted, it is now
finally on the verge of being implemented. The US regulator, Securities and
Exchange Commission, is committed to proposing an implementing rule this month
and finalizing it next year.

Meanwhile, US
companies have recently come under fire at EITI international board meetings over
their unwillingness to report their taxes, which is a basic requirement of the
scheme. This is particularly concerning, given that these companies are long
standing supporters of the EITI and members of the international board. At the
same time, the EITI board is trying to weaken the checks on how well countries
adhere to its transparency requirements – a process known as validation - which
is supported by the extractive companies on the board.

“The tide is turning towards transparency - it’s time the
big US oil majors stopped paying lip service in public while doing all they can
to preserve their secrecy behind closed doors,” said Milin. “US citizens
deserve to know how much money they are putting in state coffers, as do
citizens in resource rich countries throughout the world.”